EnLink believes in rewarding employees and officers for strong execution that drives business results.
The compensation of our executives is determined and approved by both our Governance and Compensation Committee, which includes an independent director, as well as the full EnLink Board of Directors (Board), which includes three independent directors. This determination includes an analysis of:
- The compensation practices of other companies in our industry;
- The competitive market for executive talent;
- The evolving demands of the business;
- The specific challenges that we may face; and
- Individual and group contributions made by our executives to EnLink
Overall, compensation is targeted at the market median (50th percentile) for each executive role. Our executive compensation program is grounded in a pay-for-performance philosophy, which drives individual performance and rewards contributions in support of our business strategies and achievements. Variable compensation in the form of long- and short-term incentives directly tied to the performance of the company constitutes roughly 80% of the total compensation paid to our leadership team.
Long-Term Incentives
Our long-term incentives, issued in the form of restricted unit awards, comprise 60% of our executives’ total compensation. These restricted units are typically awarded as 50% time-based awards and 50% performance-based stock awards, with the time-based units subject to a three-year graded vesting schedule and performance-based units subject to a three-year cliff vesting schedule. Performance-based awards are based on two key variables: our achievement of unit price performance (total shareholder return) relative to a defined peer group approved by the Board and a cash flow performance goal.
Beginning in 2024, we adopted formal stock ownership guidelines for our executive officers and independent directors.¹ These guidelines are consistent with the most commonly reported level of executive stock ownership at S&P 100 companies² and require the CEO to hold units equal to 5x base salary, other executive officers to hold units equal to 3x base salary, and independent directors to hold units equal to 3x cash retainers in EnLink common units. As of December 31, 2023, all executive officers and outside directors met the ownership guidelines set forth in the policy.
Short-Term Incentives (Annual Bonus)
Our 2023 Short-Term Incentive Program, which is approved by the Board, rewards all employees for the achievement of key metrics directly tied to our strategic initiatives. This bonus program is based primarily on our financial performance with additional focus on operational efficiencies, management of capital projects, and an ongoing, proactive commitment to safety and sustainability in all aspects of our business.
The components included in our bonus program are key to driving our success. Tying the compensation of our leaders and employees directly to these targets motivates our teams to focus on delivering results in a way that is consistent with our values.
Clawback Policy
In September 2023, EnLink adopted a new “Clawback Policy” in compliance with New York Stock Exchange listing requirements. The policy applies to all executive officers and/or Section 16 filers. The policy provides that if the company is required to prepare an accounting restatement due to material noncompliance with reporting requirements, all incentive-based compensation received by current and former officers in excess of what would have been received had there been no restatement, will be recovered by the company. Adoption of this policy enhances our alignment with shareholder interests, strengthens the confidence of our investors and the public in our business operations, and further illustrates the value we place on strong corporate governance.
- Common unit ownership includes common units owned outright; common units held in retirement accounts, savings accounts, and/or trusts; unvested restricted stock units; and any common units deferred in accordance with the deferred compensation plan for our independent directors.
- As reported in the Willis Towers Watson study of executive stock ownership guidelines at S&P 100 companies, published November 2022; https://www.wtwco.com/en-CA/Insights/2022/11/2022-11-Stock-ownership-guidelines-retention-requirements-SP-100.
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The information and data (collectively, “Information”) provided in EnLink’s 2023 Sustainability Report (“Report”) reflects content as of and for the period ending December 31, 2023, unless otherwise indicated. Such Information in this Report is for informational purposes only. EnLink does not make, and hereby expressly disclaims, any representation or warranty as to the accuracy or completeness of the Information contained herein. This Report is being published on August 6, 2024, and EnLink undertakes no obligation or duty to (1) update or correct the Information, (2) provide additional details regarding the Information, or (3) continue to provide the Information, in any form, in the future. EnLink reserves the right, in its sole discretion, to modify, update, change, delete, or supplement the Information from time to time without notice. The Information should not be interpreted as any form of guaranty or assurance of future results or trends. EnLink is expressly not incorporating by reference any of the Information into any filing of EnLink made with the United States Securities and Exchange Commission or in any other filing, report, application, or statement made by EnLink to any federal, state, or local governmental authority. This Report contains information based upon EnLink’s role in the broader economy, environment, and society and is presented for the purpose of responding to issues that are important to a wide range of interested parties. While events, scenarios, and efforts discussed in this report may be significant, any significance should not be read as necessarily rising to the level of materiality pertaining to disclosures required under U.S. federal securities laws, which have distinct and specific concepts of materiality.